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United's Tilton expects mergers by 2012

United Airlines CEO, Glenn Tilton, stated he expects that the growing alliance trend is bringing airlines close together to the point that they may consolidate by merger (Chicago Tribune, 25-Jan-2010). His airline has been involved in most merger speculation which sees ContinentalAirlines merging with United. Tilton, along with US Airways, is well known to be in favour of more airline mergers. During recent conferences in December, analysts asked each CEO about the prospect for mergers in 2010. For its part, Continental has stuck to being independent, but left the door open depending on how competitive Delta is now that it has absorbed Northwest.

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Expanded partnerships are crucial for Garuda as it attempts to improve its position in the international market. Garuda has been working on boosting ties with several SkyTeam members, resulting in a new codeshare with Aeromexico and an enhanced partnership with KLM.

Garuda has also been pursuing ambitious and strategic expansion of its own long haul network. However this expansion has been highly unprofitable, and in several markets Garuda would be better off relying on partners.

Lufthansa's supervisory board has approved the exercise of its call option to buy the remaining 55% of SN Airholding, the parent company of Brussels Airlines. Lufthansa acquired 45% of the company in 2009 and negotiated the option to buy the balance of the shares for no more than EUR250 million. The deal is expected to close in early 2017, once the details of the purchase have been agreed with the other SN Airholding shareholders.

Lufthansa and Brussels Airlines have an extensive codeshare agreement and are partners in the Star Alliance. Their existing relationship is such that Brussels Airlines already feels like a member of the Lufthansa Group. The main draw for Lufthansa has always been its Belgian partner's extensive African network (it is the number two airline on Western Europe-Central/Western Africa).

However, it now seems that Lufthansa will, at least partly, integrate Brussels Airlines into its Eurowings low cost brand. Lufthansa is keen to accelerate Eurowings' expansion through partners (and is also to wet-lease up to 35 aircraft from airberlin). Brussels Airlines' fleet and single-class configuration on short/medium haul should fit with Eurowings, but its unit cost and network airline business model are not characteristic of an LCC.